Balancing the Federal Budget: Trimming the Herds or Eating the Seed Corn?

Irene S. Rubin (Chatham House Publishers, January 2003)

Reviewed by David Allen Hines

 

We must invest more in our own people, in their jobs, in their future, and at the same time cut our mas-sive debtIt will not be easy; it will require sacrifice. But it can be done and done fairly…” proclaimed Presi-dent Bill Clinton upon taking office. During his administration, the federal government dramatically cut debt and deficit, achieving a 17-year quest for a balanced budget.

But through three presidencies and congressional majorities of both par-ties, the sacrifice was not easy and whether it was done fairly and effi-ciently and with good results is the subject of Irene Rubin’s insightful and interesting book, Balancing the Federal Budget: Trimming the Herds or Eating the Seed Corn?

 

Rubin’s previous work, Shrinking the Federal Government , suggested that “budget cuts under the Reagan Administration did not lead to more efficient government but rather threw a number of agencies into chaos.” Balancing the Federal Budget under-takes a study of the longer-term effects on a wide variety of agencies as a result of the efforts to balance and surplus the federal budget. Rubin concludes that some agencies successfully engaged in “trimming the herds, skillfully pruning” their size “until it reached the resource levels available” and some suffered the less desirable outcome, “eating the seed corn, consuming…quality staff, knowledge base, and credibility… making…recovery [from the budget cuts] difficult…” (p. xi). But at heart the issue she studies is did the federal government “learn to balance the budget” and if so can it then “learn to solve other policy problems as well.”

 

It would have been more engaging for the book to open with a thought-provoking case study but it begins with a more traditional and dry academic overview and history. But rather than leaving it academic, she follows with a series of fascinating case studies which practically illustrate the theories she offers.

 

Eating the Seed Corn

Part one, “Eating the Seed Corn,” looks at the impact of budget reductions on the policy and budget analysis shops of the federal government: the US Bureaus of Labor Statistics and the Census, the Congressional Budget Office, the US General Accounting Office (now the US Government Accountability Office) and the executive branch Office of Management and Budget. Rubin’s concern was determining if budget cutbacks for these agencies adversely affected their output, preventing policy makers from learning the full extent of budget balancing effects, a problem that is often overlooked by researchers But more than that, Rubin’s effort is to look at the effect on all these agencies, and how they are interrelated, whereas many researchers limit their review to one of them or those of just one branch of the government.

 

Trimming the Herds

Rubin moves on to “Trimming the Herds” in Part two, looking at the effects of balancing the budget on the US Departments of Commerce and Housing and Urban Development (HUD) as well as the executive branch Office of Personnel Management (OPM). The mix of agencies is diverse and provides valuable insight. Commerce countered ideologues who questioned its very existence “…fighting not just for its budget, but also for its life… it needed to establish legitimacy (p. 218).” HUD suffered the effects of serious management scandals during the Reagan administration and was caught in a no-win situation where Republican White Houses wanted it reduced and Democratic congresses wanted its services expanded which led to “…massive staffing reductions…[while] at the same time there was a threefold expansion in mandated programs…(p. 228).” OPM was ominously viewed by thenVice President Al Gore as a bureaucratic “problem” during his study of government performance. As a small executive branch agency with limited constituency, OPM opted to not fight its budget cuts but rather moved out of Gore’s crosshairs by “making an example of itself…reduced its staffing more than any other agency and privatized two of its functions [such that] the cuts were over (p. 253).”

 

In the end, Rubin concludes that despite “considerable skepticism about how much learning could take place in the federal government [there is] ample evidence of learning, at both the micro and macro levels

(p. 294).”

 

The biggest problem with the book is that rather than being a provocative case study of current relevant events, it now feels more like ancient history. After taking 17 years to balance the budget, President George W. Bush took little more than 17 months to return to massive budget deficits which even the most optimistic projections now carry out far into the future. Santayana famously posited, “Those who fail to remember history are condemned to fulfill it.” In the end, did the federal government really learn? Maybe Rubin’s next book can tell.

 

David Allen Hines, MPA , is a senior budget analyst, office of budget and planning, office of the chief financial officer of the Government of the District of Columbia.